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Red Birch waiting for grant funds
Federal money announced in January for energy project
Sunday, September 19, 2010
By DEBBIE HALL - Bulletin Staff Writer
From Bulletin staff reports
Red Birch Energy has not yet received any money from a federal stimulus grant it was awarded to develop green energy.
Gary Sink, co-owner of Red Birch Energy, said, "We have not seen a financial response" from the grant that was announced in January by former governor Tim Kaine and 5th District U.S. Rep. Tom Perriello, D-Albemarle County.
The two visited the Virginia Museum of Natural History at that time to announce the state would provide $1.75 million in federal stimulus funds to develop two local alternative energy projects, including $750,000 to Red Birch Energy in Bassett to develop a system to convert glycerin into electricity.
"Here it is 91â�„2 months later and we haven't gotten a dime," said Dean Price, also a co-owner of Red Birch Energy.
"There have been all kinds of loopholes and roadblocks" to getting the funds, Sink said.
New regulations in the emerging green energy field account for many of those roadblocks, he added.
Price said part of the reason the company has not yet received the funds is the required $250,000 match. The company tried numerous ways to get the match, including applying to the Virginia Tobacco Indemnification and Community Revitalization Commission, he said.
"The tobacco commission has a reserve fund, with money set aside that allows them to contribute 25 percent of matching funds needed for a federal grant," Price said. "That money is set aside for the agricultural community."�
However, the company's request was rejected by the tobacco commission, Price said. He anticipated a bank will provide the match.
Sink said the company expects to draw down part of the federal stimulus funds in the next two weeks, but for the last several months it has invested heavily in the project to create a biomass plant.
"We bought a micro-turbine engine" and are working on modifying it to burn glycerin, Sink said.
Glycerin is an odorless, colorless organic compound produced mainly as a by-product of soaps and oleo-chemicals production, and more recently the production of biodiesel, according to a University of Strathclyde (U.K.) website.
On its own, glycerin is not worth much, but it would be worth more if it could be used to produce clean electricity, according to Sink and Price.
The key is finding a way to burn glycerin without mixing it with another chemical, such as diesel or biodiesel fuel, so it will burn at temperatures high enough to prevent the release of toxins, Sink said.
Red Birch is working on a proprietary process to improveâ�„enhance glycerin "to make it more suitable for burning in a micro-turbine," he said.
If that happens, "we can convert it, make green electricity" and sell that electricity back to the grid, or electric company, Sink said.
Sink and Price said Red Birch Energy has come a long way since it began operations.
It started by buying canola seeds and pressing them to make biodiesel fuel, Sink said.
"That was not very economical" by the time farmers were paid $9 per bushel for the seeds, Price said.
As a result, the company considered other alternatives, including collecting and processing used restaurant vegetable oil to make biodiesel, Sink said.
"We've had to fine-tune that operation," and in doing so, they wondered why they could not produce food-grade canola oil that could be used by restaurants first and then collected, processed and reused as biodiesel, Sink said.
The company is working on a process to do that, but it has to meet certain FDA and other guidelines, Sink said.
"We hope to have that in place by this winter," he added.
Red Birch Energy also is negotiating with companies in New York, New Jersey, Florida and Georgia to build biodiesel refineries, Sink said. Many of those refineries would be built in the Red Birch model.
And, in a recently announced pilot program, five Carroll County school buses will begin burning biofuel, Price said.
The company has found a distributor in Hillsville, he said, adding, "We're very excited about" the pilot program and are hopeful it will expand.
He also hopes the need for biodiesel continues to grow, Price said.
Currently, only about 3,000 gallons of biodiesel are produced per day at Red Birch Energy in Bassett, Price said, and noted that facility is capable of producing 2.5 million gallons of biofuel per year.
"That would be more than enough for all the school buses in Carroll County, Patrick County, Henry County and Franklin County combined" with some left over for sale to other entities, Price said.
Also in January, Martinsville received $1 million in federal stimulus funds to turn methane at a former landfill into electricity, according to previous reports.
"We have not received" those funds yet, Martinsville City Manager Clarence Monday said on Friday.
The stimulus funds are earmarked for the second phase of the methane project, which Monday estimated will cost $2.5 million.
According to a June report, the city was seeking a $333,333 grant from the tobacco commission to use as a part of the matching grant required for the funds. "We have not received any word on that yet," Monday said.
The city will fund the remaining $1.2 million needed for the project, or "we will try to find other grants" for those funds, Monday said.